The headline NatWest Yorkshire & Humber Business Activity Index increased to 64.5 in June, from 63.7 in May, signalling the sharpest expansion in private sector activity since August 2020.
Notably, the index was only 0.1 points shy of matching the survey record set 10 months ago.
Yorkshire and Humber saw the third fastest expansion in output in the 12 monitored UK regions and was only outpaced by the North West and Wales.
Yorkshire was only one of two regions - the other being London - where activity growth accelerated when compared with May.
Richard Topliss, chairman of NatWest North Regional Board, said: "The Yorkshire & Humber PMI delivered another strong month during June.
"The Business Activity Index was just a fraction off matching its survey record seen last August and signalled a sharp uptick in output growth.
"Out of the 12 monitored UK regions, Yorkshire & Humber was just one of two where activity growth actually accelerated on the previous month."
NatWest said that June saw a sharp expansion in new orders placed with private sector companies in Yorkshire and Humber.
Although the pace of increase slowed from May's record, it was the second quickest since the survey data were first collected in 1997.
According to firms, clients re-opening their businesses helped raise demand for goods and services.
Mr Topliss said: "Supporting the latest expansion was a further strong improvement in demand conditions, which firms linked to loosening lockdown restrictions.
"That said, survey data pointed to sharper rates of input cost and output price inflation during June.
"Price pressures are particularly acute in the manufacturing sector, but we're now seeing a significant spillover into services. With the release of pent-up demand providing such a boost to sales for now, we will continue to watch this space to see what the impact will be of rising prices."
Although the Future Activity Index edged down to a five month low in June, it was 31.6 points above the 50.0 mark which separates optimism and pessimism and therefore signalled a strong level of business confidence.
Expectations of a strong demand-led recovery underpinned forecasts of sharp activity growth in the coming 12 months. Notably, Yorkshire and Humber topped the regional optimism rankings in June.
Staffing levels across private sector companies in Yorkshire and Humber increased for a fifth month in a row during June.
The rate of jobs growth was sharp overall and among the fastest ever recorded by the survey.
According to firms, employment was expanded to support growth in the coming months. The pace of increase in workforce numbers matched that seen across the UK as a whole.
Stronger pressures were exerted on private sector firms in Yorkshire and Humber in June, as signalled by the seasonally adjusted Outstanding Business recording above the 50.0 no-change mark.
The rate of backlog accumulation was sharp, but slowed slightly from that seen in May. Where a rise in incomplete work was recorded, firms linked this to strong demand growth.
Private sector businesses in Yorkshire and Humber observed soaring input cost inflation during June. In fact, firms registered the strongest increase in their operating expenses for 13 years. According to surveyed companies, shortages at suppliers for a wide range of inputs continued to exert upward pressure on prices. At a sector level, manufacturers led the increase, but inflation was also sharp across services firms.
In response to intensifying cost pressures, private sector firms in Yorkshire and Humber raised their charges during June to the greatest extent since data on output prices were first compiled in 1999. Selling prices at manufacturers were increased at a substantially stronger pace compared to service providers, though rates of inflation quickened in both sectors.
The headline NatWest Yorkshire & Humber Business Activity Index is a seasonally adjusted index that measures the month-on-month change in the combined output of the region’s manufacturing and service sectors